Trump Says US Should Kill Landmark CHIPS And Science Act

US president Donald Trump has signalled that the landmark US Chips and Science Act is now under directly threat of being axed.

In his speech to the US congress on Tuesday, Trump urged the killing off of President Biden’s bipartian US Chips and Science Act of 2022.

“Your CHIPS Act is a horrible, horrible thing,” Trump was quoted by Reuters as telling US House Speaker Mike Johnson and Congress. “We give hundreds of billions of dollars and it doesn’t mean a thing. They take our money and they don’t spend it. You should get rid of the CHIPS Act and whatever is left over, Mr. Speaker, you should use it to reduce debt.”

US Chips and Science Act

In August 2022 the Biden Administration had signed into law the $52.7 billion US Chips and Science Act, which seeks to encourage chip makers to build more semiconductor manufacturing capacity in the United States.

The US Chips Act is considered to be one of the major US industrial scheme in almost a decade, and it aims to minimise US reliance on Asia for electrical components, and processors – a reliance that was brutally exposed during the chip shortages of the Covid-19 pandemic.

Essentially the US Chips Act allocated $39 billion in grants, loans, as well as 25 percent tax cuts to boost American semiconductor production.

In addition $13 billion was set aside for chip research and development.

The US Chips and Science Act competes with Europe’s 43 billion euro European Chip Act, and China’s $40 billion state-backed investment fund – both of which are being used to encourage the building of more chip manufacturing capabilities in their respective locations.

Last month it was reported that the Trump administration was seeking to renegotiate existing awards to semiconductor manufacturers under the US Chips and Science Act, and may delay some approaching disbursements.

CHIPS awards

But now it seems Trump is wanting to go one step further and is urging Congress to kill the Chips Act.

“We don’t have to give them money,” Trump said during his speech, suggesting that avoiding new tariffs would be enough to convince chips firms to build US fabs and plants.

However there is no doubt that the US CHIPS Act has helped convince chip firms to build facilities in the United States.

For example Intel received a major Chips Act award in March 2024.

Intel said it has so far received two payments amounting to $2.2bn in Chips Act subsidies, while TSMC said it has received $1.5bn in funds as per its agreement with the previous administration.

Other companies with CHIPs awards include Hemlock Semiconductor, BAE Systems, Bosch, Micron, GlobalFoundries and Texas Instruments.

Samsung, the world’s largest memory-chip maker, has said it plans to invest more than $40bn to build two new advanced chip manufacturing facilities in Taylor, Texas, for which it received a Chips Act award of up to $6.4bn in grants.

This week TSMC said it would invest an additional $100 billion (£79bn) in its US operations.

The new capital will go toward building six new facilities in Arizona, where TSMC already has several operations, and brings the company’s total US investment to $165bn.

TSMC had in November been awarded $6.6 billion under the Chips and Science Act.